Final-salary pension schemes reaches record low

| October 28, 2009 | 0 Comments
Final-salary pension schemes reachesd record low

An annual report from the Office for National Statistics has revealed that 100,000 private sector final salary schemes closed in 2008, taking the number of schemes to a record low of 2.6 million.

The recession has resulted in a number of companies closing their final-salary schemes to existing members, as well as new members.

Last month, Dairy Crest, which is one of the UK’s largest milk firms and makes brands such as Country Life and Clover butter, said it would close its final salary pension scheme to existing members, having closed the scheme to new employees in 2006.

This followed announcements from other blue-chip companies including banking giant Barclays, oil giant BP and supermarket Morrisons, who have all announced plans to close their final salary schemes.

In April, the British subsidiary of the US insurance broker Aon said it planned to reduce its pension contributions to cut its costs - saying it needed to be “protected in challenging conditions”.

Earlier this year, PricewaterhouseCoopers predicted that 42% of schemes still open to existing members would close in the next five years.

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